1 Chapter 18 Competitive Strategies: Attracting, Retaining, and Growing Customers

2 What is Relationship Marketing? Relationship Marketing is the Process of Creating, Maintaining, and Enhancing Strong, Value-Laden Relationships With Customers and Other Stakeholders.

3 Customer Relationship Marketing Why the new emphasis on retaining and growing customers? Losing a customer means losing the entire stream of purchases over a lifetime of patronage - the customer lifetime value.

4 Customer Satisfaction Expectations are Based on Customer’s Past Buying Experiences, the Opinions of Friends, & Marketer and Competitor Information and Promises. Product Falls Short of Expectations Customer is Dissatisfied Product Matches Expectations Customer is Satisfied Product Exceeds Expectations Customer is Highly Satisfied or Delighted!

5 Customer Satisfaction Purpose of marketing is to generate customer value profitably – offer customer satisfaction without sacrificing profits.

6 Customer Loyalty and Retention Highly satisfied (delighted) customers produce benefits: They are less price sensitive, They remain customers longer, They talk favorably about the company and products to others. Tremendous difference between the loyalty of satisfied customers and completely satisfied customers. Delighted customers have emotional and rational preferences for products, and this creates high customer loyalty.

7 Building Lasting Customer Relationships Financial Benefits, i.e. Frequency Marketing Programs Social Benefits, i.e. Learning Individual Customer’s Needs & Wants Structural Ties, i.e. Supply Customers With Special Equipment

8 Customer Retailer Producer Vendor Raw Material Supplier Customer Value-Delivery Network Order Delivery

9 Total Quality Marketing Quality is the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs. Marketers play a major role in helping their companies define & deliver high quality products and services to target customers: Must correctly identify the customers’ needs and requirements and communicate this to product designers, Marketing must deliver each marketing activity to high quality standards.

10 Steps in Analyzing Competitors Identifying the company’s competitors Assessing competitor’s objectives, strategies, strengths and weaknesses, and reaction patterns Selecting which competitors to attack or avoid

11 Overall Cost Leadership Differentiation Focus Middle of the Road Basic Competitive Strategies

12 Competitive Strategies: Value Disciplines Operational Excellence Customer Intimacy Product Leadership Companies Gain Leadership Positions by Delivering Superior Value to their Customers Through These Strategies:

13 Market Leader Market Challenger Competitive Marketing Strategies Firms Competing in a Given Target Market Differ in their Objectives and Resources so May Choose the Following Forms: Market Follower Market Nicher

14 Balancing Customer and Competitor Orientations Customer-Centered Competition -centered Product Orientation Competitor Orientation Customer Orientation Market Orientation Yes No YesNo